Planned Giving

Charitable Lead Trusts

The Charitable Lead Trust (CLT) is a fairly complex instrument. However, it can be a powerful tool in meeting your personal philanthropic objectives and your family's financial well-being. Furthermore, the current economic climate with historically low interest rates, makes a CLT worth considering if you have substantial assets you wish to transfer to your heirs. It is often described as the reverse of a charitable remainder trust, and to an extent it is. With a CLT the income interest goes to the charity annually during the life of the trust with the remainder interest eventually returning to the donor or, and more often, to the donor's heirs.Significant gift and estate tax benefits can be realized by establishing a Charitable Lead Trust. Basically, the donor transfers assets to the CLT, which can be created with a fixed payout rate or a variable payout rate, for a specified term of years. When the trust term ends, the principal along with all appreciation is transferred to the donor's stated beneficiaries, often adult children or grandchildren at a very favorable tax rate This is known as non-grantor CLT. If the property returns to the donor it is called a grantor CLT, and the tax benefits differ significantly.

As noted above the CLT is a complex form of planned gift. Therefore, we would especially encourage the donor to consult a trusted attorney or financial advisor when you are considering this form of gift which when funded remains irrevocable.